The technology landscape of the 21st century is everchanging. The shelf life of technology has reduced from decades to sometimes as low as a year. Large corporates are waking up to this changing reality as they struggle to respond to the changing market environment brought about by technological advancements. Corporations must find ways to adapt and acquire newer technologies to stay ahead of the technology curve.
Large corporates are designed to make products or services at a large scale. Their processes and systems are tuned to large-scale manufacture rather than necessarily innovation. The market environment, however, evolves at an accelerated pace. Besides, their large size can make them slow movers in technology adoption. Thus, their products or services become outdated and may be replaced within a year. They struggle to adapt and acquire newer technologies and the skillset required to develop them, often due to their size. The best way to keep pace with rapid technology changes is to borrow, co-create or form collaborative partnerships with young and agile startups that work with these new technologies.
Enabling collaboration makes economic sense
Most corporates have in-house Research and Development (R&D) teams but have space limitations. An R&D team forms a small percentage of the company’s employee base. But given the agility, they need to be responsive to the marketplace. Acquiring the core skill sets required and training the rest of the team in-house costs time and money.
Startups, however, are agile and can help the corporate be responsive to the market, which is critical. They often have a niche technology skillset in-house. Hence, the R&D time is cut short.
The collaboration helps them launch the new technology quickly, thus staying relevant in a competitive scenario. Going to market first benefits the corporate, giving it that first-mover advantage in a competitive market. The startup helps add agility and saves time and cost for the corporate. A collaboration makes better economic sense overall.
Building partnerships creates a win-win situation
The startups, in return, get the proof of concept (PoC) of their technology validated with a large buyer stepping in. They get access to the corporate customer base and develop a revenue stream. It is critical for a young startup as they often must build their customer base from scratch. The startups get to market-validate their technology with real-time use cases and verify how customers respond to the technology.
Partnerships create opportunities for corporate leadership to mentor startups and give them the guidance required to succeed in a competitive market. A large corporate may have distribution access and vendors who can supply the components at much cheaper rates. They may also have a global market presence and be willing to invest and scale up the startup if the product is viable.
For example, a large petroleum corporation with distribution outlets across the country collaborated with a few startups at T-Hub. These startups gained access to the corporation’s distribution network in the process.
Within two months of the collaboration, the startups were able to access these retail locations across the country. A startup on its own will struggle to scale at such a pace. A collaborative partnership helps them get a robust retail support network from a large corporation.
Such collaborations also have a positive impact on the underlying technology being developed.
Fostering tech validation through cooperation
Startups often need data and real-life use cases to run and test their technology models and solutions. They need real-life situations to implement and check the efficacy of these technologies. Only a few corporates are willing to provide their real-time data to run a test for a startup unless there is a collaboration. But for startups, accessing these corporate databases helps improve and validate their underlying technology.
Suppose a startup is working in the fintech space. In that case, it gets challenging to access the databases of a bank doing millions of transactions due to regulatory, security, and privacy concerns. If the bank enters a collaborative partnership with the startup, it stands to gain by adopting the startup’s new technology and improving its services. The startups gain when they validate the efficacy of the technology. It helps them improve the technology, ultimately benefiting the banks and the customers. The relationship is symbiotic.
The corporates may not be agile, but they bring value through their thought leaders. The C-level executives know where the market is headed and how to leverage the best of the technology. It enables the startup to cut short the time it takes to get the right product-market fit. The guidance of corporate aid startups invariably and has a positive impact on the overall economy.
Building a relationship of equals
A collaborative relationship between a startup and a corporate is not that of a vendor or a service provider. A collaborative partnership is a relationship of equals where both parties involved must co-create. Corporations also gain an understanding of how startups think and their approach to problem-solving. Working closely helps the corporates realise the startup’s strength and the areas where they require support.
At T-Hub, we are at the forefront of driving corporate innovation in India, acting as a catalyst and enablers. So far, we have carried out nearly 70 plus corporate innovation programs involving leading industry players, such as Maruti Suzuki, Renault Nissan, Boeing, Meta, Boeing, Raytheon technologies, and others. It is the largest number of corporate innovation programs in the country.
These programs have been instrumental in building a solid partnership between the startup and the corporate ecosystems.
Apart from support and guidance from corporates, the startups at T-Hub over the last year have gained access to corporate grants to the tune of INR five crores. Corporates are increasingly viewing these partnerships as responsibility for nurturing the next generation of entrepreneurs.
At T-Hub, we set the expectations right on both sides. We help both parties achieve clear-cut outcomes and deliverables out of this relationship while protecting the interests of both. We help corporates save time and money while we help startups protect their Intellectual Property (IP) rights. T-Hub today plays a significant role in enabling a conducive environment for both parties to form their partnership. We play the role of a catalyst. Once the partnership matures, both parties work together. Our aim is to build partnerships that last a lifetime.